SWIFT, the international payment network, has announced the launch of a Proof of Concept (PoC) gateway that will use blockchain technology.
SWIFT Chief Announces
— Spiros Margaris (@SpirosMargaris) January 30, 2019
The step into decentralized technology adoption is being made by allowing blockchain software house R3 to connect to the experimental gateway, called the Global Payments Innovation (GPI). Through this, SWIFT will be pursuing its larger agenda of creating a more transparent and efficient international payment system. The current technology being employed usually takes days to clear a cross border settlement. This will vastly improve with blockchain being used. The GPI is expected to have “faster, same day use of funds”.
The original trial of using decentralized technology had left SWIFT disappointed. The test was conducted in a sandbox environment and the institution said, “Further progress is needed before it will be ready to support production-grade applications in large-scale, mission-critical global infrastructures.”
Nonetheless, with SWIFT acknowledging the advantages blockchain has, the banking institute will now allow R3 to authorize payments using its GPI Link. This means GPI based settlements will be routed through R3’s Corda network, giving faster, transparent and efficient processing.
SWIFT CEO Gottfried Leibbrand said, “Our new GPI platform is extremely interoperable and open, and we’ve always had links to other networks. …we are announcing later today a proof-of-concept with the R3 blockchain on trade where you can initiate a payment on the trade platform and then it goes into GPI. So we’re exploring interconnectivity with a lot of things.”
With banks and other financial institutions that have joined the Ripple network numbering over 200, SWIFT has realized that its previous stance on DLTs just might be its undoing. The organization is still lacking, since the whole GPI Link with R3 is still a PoC. Whether it will be able to give a product that will retain its dominance over the global financial system on time is something many financial institutions are closely monitoring.
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